With Birdman back, Heat face tax bill in excess of $33 million

MIAMI — The pieces fit, with 14 of the 15 players from the Miami Heat's 2013 NBA championship roster under contract for next season.

The price tag, however, is another story, a scenario as frightening as John Lucas III or Jason Terry attempting to defend a LeBron James dunk.

With Wednesday's signing of backup center Chris Andersen on a one-year, $1.7 million contract that also has a player-option year, the Heat currently stand with an $88 million payroll for 2013-14.

Complicating the issue, however, is the exponential increase in what previously stood as a dollar-for-dollar luxury tax.

Under the new formula that goes into effect starting this coming season, the Heat, by currently standing $16 million over the $71,748,000 luxury-tax threshold set Tuesday by the NBA, would have to write a tax check to the league of $33.6 million at season's end.

To put that 2013-14 tax figure into perspective, the Heat, over their history, according to the highly respected computations of ShamSports.com, have previously paid a total of $36 million in tax payments, including $13.3 million on last season's championship roster.

According to the NBA's new tax schedule, the tax is $1.5 dollar for each dollar on the first $5 million above the tax threshold, with a $1.75 rate on the next $5 million above, a $2.5 rate for the next $5 million, and $3.25 per dollar for exceeding the tax rate by $15 million, where the Heat currently stand.

Because the tax bill is not computed until season's end, the Heat, through trades and other means, could reduce their tax bill in the interim.

A primary means would be exercising the team's one-time "amnesty" move on an eligible player from the current roster. Under the amnesty program, a team pays off a player's remaining salary and releases him, with that salary then counting toward neither the salary cap nor the luxury tax.

Based on the Heat's newly calibrated tax position, which puts them into the fourth tier of the tax, an amnesty of Mike Miller's $6.2 million salary could save the Heat upwards of $17 million off of what currently stand as that $33 million tax bill. An amnesty move of Joel Anthony's $3.8 million salary would shave roughly $9 million off the $33 million tax bill.

Heat President Pat Riley ended the season downplaying a potential amnesty move.

"Unless I get a mandate about [amnesty], we haven't talked about it," he said. "We really haven't talked about it."

But Riley also said such decisions ultimately sit with owner Micky Arison.

"Whether or not we ever use it or exercise that," he said of amnesty, "time will tell."

That time is now at hand, with the 2013 offseason amnesty period running through next Wednesday.

The tax also figures to limit the Heat going forward this offseason to little more than minimum-salary moves on the free-agent market.

With Andersen agreeing to a contract starting at a 20-percent raise from last season's minimum-scale salary, it left the Heat in position to still utilize their $3,183,000 taxpayer mid-level exception on a free agent. However, under the Heat's current, pre-amnesty tax position, the addition of a player at that mid-level exception would come accompanied with a $10 million tax charge for 2013-14.

The Heat previously added Shane Battier and Ray Allen with mid-level exceptions in the wake of bringing James, Chris Bosh and Dwyane Wade together in the 2010 offseason. Riley, though, also has been able to add contributing pieces at minimal salaries, such as Andersen, Rashard Lewis and James Jones.

The Heat formally announced Andersen's signing Wednesday, with Riley saying in a statement, "We are ecstatic that Chris Andersen has decided to stay with the Miami Heat. We would not have won the championship without him and we are looking forward to him having an even better season next year."

Andersen said in the team's release, "I'm excited to be back with the Heat. I believe we have an opportunity to repeat and I'm looking forward to the challenge."

Summer break

At 2-1 at the Orlando Pro Summer League, the Heat had Wednesday off before returning for a 1 p.m. Thursday game at the Amway Center against a similar team of draft picks, free agents and prospects from the Detroit Pistons.

The Heat close out their Orlando summer-league schedule Friday and then open a week at the NBA's Las Vegas summer league with a Saturday game against the Toronto Raptors on the UNLV campus. Unlike the Orlando event, the Las Vegas summer league is open to the public.